MINNEAPOLIS – Piper Jaffray Ventures Inc., which recently held a $70 million close, expects to reach a $100 million target in October for Piper Jaffray Healthcare Fund III.
The vehicle made an initial close on $50 million in January, with investments from existing limited partners including the Minnesota State Board of Investment, U.S. BankCorp, PNC Equity Capital Management, Bank of America and some private individuals.
The fund closed on an additional $20 million in July with a commitment from previous investor, Dresner Kleiner Benson, and new L.P.’s, GE Capital Equity Capital Group and NSP Pension Plan.
The Minnesota State Board of Investment has established a 20% stake in the fund and contributes capital periodically to maintain its position.
Piper Jaffray Healthcare has made six investments to date: three in the e-healthcare sector, two in medical devices and one in health-care services. The firm plans to invest $3 million to $5 million in each of its portfolio companies, ranging from one to several rounds of financing.
The first health-care fund, which wrapped on $27 million, consisted of investments from Piper Jaffray affiliates, while the second, which was fully invested by the end of 1998, closed on $50 million.
The firm invests in early- to late-stage domestic companies, although it has no geographic preference within the United States. While it usually takes the lead in its investments, the firm typically is not the sole investor, said Buzz Benson, a general partner of the firm.
Piper Jaffray Ventures also has a technology division for which the firm has recently started to gather investments. U.S. Bancorp Piper Jaffray Fund II is targeted at $100 million and expects a final close in November. The first technology fund, worth $33 million, invested in early-stage companies throughout the United States.
The firm has six general partners split between health care and technology. Gary Blauer, Chiler Beeler and Marco DeMiroz are the general partners on the technology side, while Ned Scheetz, Ken Higgins and Benson are the general partners for health-care funds.
The one investment strategy common to both the technology and health-care funds is their affiliation with Piper Jaffray’s banking division. A group of 37 industry experts, research analysts and investment bankers work full-time researching health-care investment opportunities and between 50 and 60 people focus on technology investments for the firm, Benson said. “We call that our feet on the street.”